Unit 10
Economic and Political Impacts of Tourism
Learning Objectives
Identify and explain the economic
benefits of tourism.
Identify and explain the potential
economic problems that can be created
by tourism.
Explain why tourism revenues are
considered to be an export.
Explain what is meant by the tourism
multiplier concept.
List the various organizations that help
promote tourism.
Explain the steps involved in tourism
planning.
Explain why tourism development can
lead to political disagreements.
Introduction
In some countries Tourism is one of the top five exports.
30% of all tourism expenditures are
made during trips in the U.S. and Canada.
Estimates are from:
the number of arrivals times (x)
the average expenditure (money spent) per visitor.
Estimates can vary. It depends on the method used to approximate (find the average of) the number of arrivals and average expenditure.
Definitions of who is identified as a tourist also differ:
Some surveys say a tourist is someone who stays away from home overnight.
Some surveys say a tourist is someone who travels at least 50 miles from their home.
Tourism and Economic
Growth
Development of tourism offers a
country a way to develop the economy.
Economics: The social science that
seeks to understand the choices people
make in using their scarce (little) resources to meet their wants .
The Concept of Comparative
Advantage
Tourism has comparative advantage
over other industries if it yields (gives) a better return on the region’s human and natural resource inputs.
Tourism is likely to have a comparative advantage for
a region if:
The region has features (sites) that are highly attractive to visitors.
It is easily accessible (easy to get to) for tourists.
It has a good infrastructure and
abundant labor force ( a lot of local workers).
The region has no other
industry alternatives.
Tourism and foreign
exchange rates
The Relative exchange rate of currency is one of the most important factors in determining the level of international tourism to (and from) a country.
At the beginning of the 21st century the United States became a popular destination for international travelers because the exchange rate of the dollar was good.
The power of a single currency (such as the Euro) can have an impact on tourism expenditures.
The Multiplier Concept
Using the multiplier concept is one of the most common ways to assess the economic impact of tourism on a region.
The multiplier concept: the extra economic activities that result when money is spent in a region from the buying of local goods and services.